Living probate occurs when an individual becomes disabled and doesnt have a comprehensive up-to-date estate plan in place. Disability means that the individual cannot handle his or her finances and daily business affairs.
A comprehensive up-to-date estate plan includes a financial/general durable power of attorney, health care power of attorney, living will, and HIPAA release. It may also include a revocable living trust. In addition, if you have minor children your plan should also include a stand-by guardian designation and first responder authorization.
If you dont have the legal documents in place that you need, a living probate is necessary. Living probate is a court guardianship process; in some states that process is called conservatorship.
Living probate is a loss of control because the court takes over your finances. The court freezes your assets and the appointments a guardian, which may or may not be a family member or someone you know. The court may appoint a stranger, a local attorney to be the guardian/conservator.
Living probate is expensive because its a court supervised process and the guardian/conservator has to report back repeatedly to the court and seek permission for actions.
In addition, living probate is public, which means that anyone can witness the testimony describing why you should be ruled incapacitated. For example, a social worker, family member, or medical professional may testify that you dont know the day of the week, you dont recognize family members, you get lost driving or walking home, you are violent when you get confused, you cant pay your bills, and the like.
Living probate, the guardianship or conservator process can be avoided if you have the right estate plan in place and your trusted helpers (i.e. successor trustees, health care agents, financial power of attorney agents, and stand-by guardians for minor children) know about it.